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PEER COMPANIES

Domestic brokerages hold a mixed view on the forthcoming March quarter results of the pharmaceutical major Cipla. The company will report its quarterly numbers on Friday.

Edelweiss Securities expects the drugmaker to report 23.80 per cent rise in profit at Rs 399.90 crore. Sequentially, it sees profit rising by 3.4 per cent. Sales are seen rising almost flat at 0.3 per cent YoY to Rs 4,418 crore. Ebitda is seen falling by 18 per cent YoY in March quarter.

“Domestic sales will likely grow 18 per cent YoY, as Cipla completes recalibration and normalisation of its trade generics business. US revenue ($125 million) is expected to normalise, down 6 per cent QoQ, following tapering of gSensipar revenues which continued to benefit in the sequential quarter. South Africa & Global Access (SAGA) is expected to grow 5 per cent YoY, on the back of the higher volume of tender supplies, which commenced in July 2019,” the brokerage house said.

Updates on the domestic business growth, gAdvair filing timeline and Albuterol launch in the US are among the key monitorables in the quarterly results. Market participants should also zero in on the updates related to non-exclusive licensing agreements with drug major Gilead Sciences Inc for manufacturing and distribution of remdesivir, a potential therapy for Covid-19.

On the other hand, Phillip Capital expects 8.1 per cent YoY growth in net profit of Cipla on 4.4 per cent drop in revenue. It also projects 17.60 per cent YoY drop in EBITDA.

“The estimate of 4 per cent sales decline due to high base of gSensipar in the US, some impact of currency in African business and Covid-led shipment delays,” the brokerage house said.

On the other hand, Emkay Global Financial Services sees a 3 per cent drop in net profit of Cipla.

“While Q4 is the weakest quarter, for Cipla, it should be relatively strong this time due to high demand for respiratory products. US business should be in line with management guidance of $120-125mn for Q4. Margins should expand QoQ, as the base had inventory write-offs,” Emkay said.